Shell decommissioning of the Brent Platform – haven’t we been here before?

In February 2017 Shell lodged plans to the Department for Business, Energy and Industrial Strategy (DBEIS) to undertake the decommissioning of offshore petroleum installations in the Brent Field, located in the North Sea, north east of the Shetland Islands. The Brent field is an iconic field, having commenced production in 1976, producing a sweet light crude oil that has been used as a benchmark crude, serving as a reference price against which other crudes are measured. However, given the decline of production from the Brent field, the Brent benchmark crude now comprises a mix of crudes from the Brent, Forties, Oseberg and Ekofisk Fields in the North Sea.

The Brent field is a giant field with installations to match: the topside of the 4 platforms being removed range between 16,000 and 31,000 tonnes. Three of the Brent installations (Bravo, Charlie and Delta) comprise concrete legs, known as ‘Gravity Based Structures’ (GBSs) (also known as Condeep Structures), which vary between 290,000 and 340,000 tonnes. In its detailed decommissioning plan that has been lodged with DBEIS, Shell recommends that the three GBSs remain in place, since they cannot be refloated or dismantled in one piece. This is seen as the best option based on technical, safety and cost grounds. Shell proposes to remove the top of the installations and seal the GBSs with concrete caps, and fit navigation aids. The decision to leave the GBSs in place has not been taken lightly. In its Decommissioning Plan, Shell outlines the reasons for leaving these structures in place. In particular, Shell stresses that these supports are made from very thick concrete with steel bars and solid ballast, and were anchored down during installation by flooding the legs with water. The GBSs were not intended to be removed once they had been placed on the seabed, and at the time these platforms were designed and installed, there was no requirement to remove such structures. These GBSs have been extensively used in the North Sea (both in the UK and Norwegian Sectors) as they provide the best stability in the rough North Sea, and have the added advantage of enabling oil to be stored in them if required.

It is Shell’s recommendation to leave the Brent GBSs in place that have united environmental groups to oppose the plan. This is not the first time that Shell, or the decommissioning of Brent Field installations, has come to the international attention. In 1995, after three years of evaluation of options, Shell was authorised by the UK Government and the OSPAR Convention (the Convention for the Protection of the Marine Environment of the North-East Atlantic) to dispose of the Brent Spar, an oil storage and tanker-loading buoy from the Brent Field, on the North Feni ridge, in over 7,000 feet of water. What followed was international outrage, with Greenpeace playing a lead role. At the heart of the opposition was the contention by Greenpeace that over 5,500 tons of oil remained in the Brent Spar, a figure countered by Shell who said only 50-100 tonnes remained. After a series of protests and boycotts in Germany and Northern Europe, Shell withdrew their plan to scuttle the Brent Spar in deepwater, with the Spar instead dismantled by Det Norsk Veritas in a Norwegian fjord. Soon after the withdrawal of the plan to scuttle the Brent Spar, the UK Energy Minister called the Greenpeace campaign ‘completely misleading’, leading to a public apology by Greenpeace for its mistake in the estimation of the amount of oil remaining in the Spar.

In the latest controversy to affect the Brent Field, environmental groups claim that the proposed decommissioning plan may be in breach of international law. The two main international law instruments related to the decommissioning and disposal of disused installations is the United Nations Convention of the Law of the Sea (UNCLOS) and the OSPAR Convention. Under UNCLOS, there are a number of general duties to protect the marine environment, particularly Articles 191 and 192. The primary law relating to the OSPAR convention is the decision of the OSPAR Commission after the Brent Spar incident, known as OSPAR Decision 98/3 on the Disposal of Disused Offshore Installations. Under this decision, the dumping or leaving in place (wholly or partly) of disused offshore petroleum installations is prohibited within the OSPAR maritime area (which covers the Brent Field). There are, however, exceptions to this prohibition, including:

  • steel installations weighing more than ten thousand tonnes in air;
  • gravity based concrete installations;
  • floating concrete installations;
  • any concrete anchor-base which results, or is likely to result, in interference with other legitimate uses of the sea.

Given the weight and nature of the structures, it is well within the OSPAR convention exceptions to leave the structures in place, in line with the ability to remove the GBSs, and whether it is safe to do so.

Indeed, it is important to realize that there are instances where the removal of a structure may well pose a greater threat than leaving it in place. Such a threat can be to the environment itself (such as the debate surrounding the rigs to reef program) and safety to those undertaking the removal of the installation. Indeed, in the 2000s the MCP-01 concrete platform, located in the North Sea, was decommissioned. The MCP-01 was also a GBS, containing 386,000 tonnes of ballast. After a consideration of all possibilities for removal, the decision was made to leave the subsea GBS structure in place, with as much of the equipment and materials as practicable removed from the concrete substructure and reused/recycled. The primary reason for this decision was the risk to workers, particularly those involved in demolition, marine operations and offshore diving operations.

Whatever decision the UK government makes regarding the decommissioning plan for the Brent Field, it is essential that considerations beyond environmental groups’ interest be considered. Such a decision on whether to leave the GBSs in place need to also consider the safety of those undertaking the removal and recycling, and whether more environmental harm will be caused by removing a 300,000 tonne structure that has been in place for over 40 years. Whatever happens, the ensuing debate regarding this issue is sure to be interesting.

Blog by Professor Tina Hunter

 

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Small holdings, big complexities

This blog post, by Malcolm Combe, originally appeared as an online article for the Journal of the Law Society of Scotland, available here. It is reproduced here with permission.

The law relating to leases of rural property in Scotland has long been an area replete with special considerations. There is a surfeit of statutory regulation in relation to crofting and agricultural holdings, but rural considerations flow from before that surfeit: for example, a rule about delectus personae to restrict assignation (Bell’s Principles, 1216).

Crofts (governed by the Crofters (Scotland) Act 1993, as copiously amended), and agricultural holdings (whether a “1991 Act” tenancy or one of the more recently introduced fixed-duration tenancies in terms of the Agricultural Holdings (Scotland) Act 1991 or the Agricultural Holdings (Scotland) Act 2003, both as extensively amended) are relatively well known. Those dabbling in rural matters can normally be on guard for these. But for the unwary and perhaps even unlucky solicitor, a small landholding might be chanced upon in a transaction.

Small landholdings are a type of rural lease that can be found outwith the traditional crofting counties (of the Highlands and Islands) that are not quite governed by the agricultural holdings regime. They have not – yet – been much affected by Holyrood legislation, save for s 6 of the Crofting Reform etc Act 2007, which amended the Crofters (Scotland) Act 1993 to allow small landholdings to be converted into crofts in areas outwith the traditional crofting counties but now designated as new crofting areas (namely Moray, the Cumbraes, Arran and Bute, per the Crofting (Designation of Areas) (Scotland) Order 2010, SSI 2010/29), and now part 11 of the Land Reform (Scotland) Act 2016. It is as a result of that more recent amendment that small landholdings will now find themselves subject to a bit more legislative attention.

History and current status

The statutory system of crofting was introduced to parts of Scotland by legislation passed in 1886, but the rest of Scotland had to wait until 1911 before its smallholdings were subjected to similar, and rather powerful, statutory control. The Small Landholders (Scotland) Act 1911 essentially expanded the system introduced by the Crofters Holdings (Scotland) Act 1886 to the whole of Scotland, bringing in control for matters like compensation for improvements (namely what a landlord would have to pay a tenant for any works introduced by the tenant) and security of tenure (meaning the ability of a tenant to hang around on land even at the end of the original term of a lease, provided rent was being paid and other obligations complied with). The Crofters (Scotland) Act 1955 then reintroduced the division between Highland and Lowland Scotland, leaving the 1911 Act and the 1886 Act (and indeed many other Acts) to govern leases of small landholdings outwith the crofting counties.

To this far from simple system, an extra layer of complexity can be introduced. The 1911 Act actually introduced two different regimes, where someone who rented a smallholding could be a “landholder” or a “statutory small tenant” (in terms of s 32 of that Act), depending on whether it was the landlord or the tenant (or indeed a predecessor of either of them) who had built the structures used for that smallholding. Generally speaking, a statutory small tenant has less in the way of statutory rights than a landholder.

For a variety of reasons, there are not that many of these regulated leases still in existence. Notwithstanding that relatively low number – which seems to be settled at 74 (yes, seventy-four) – there has been a perception that these leases have been ignored when other leases have not. In part, any neglect is ably demonstrated by the mass of legislation about crofting and agricultural holdings, but of course the low number of small landholdings also explains that lack of legislative attention. That point notwithstanding, it may be the case that parties to such leases do not have a particularly clear handle on what arrangement they have, not to mention that there are arguments about whether such arrangements are suitable for the present day, and as such it is a worthwhile exercise to have a look at small landholdings.

Modern reform?

To this mix, s 124 of the Land Reform (Scotland) Act 2016 can now be added. This was the result of a Scottish Green Party amendment at stage 3 of the then bill. It committed Scottish ministers to: (a) review the legislation governing small landholdings; and (b) lay a report of that review before the Scottish Parliament no later than 31 March 2017. This the Scottish ministers have done. The report can be found here.

The report is an impressive piece of work. (I declare an interest, in that I had some limited input to it: a couple of drafts were circulated to me and I commented on them. To be clear though, I declare that interest to give the credit to those that deserve it.) A lot of people inputted to this document, and of course those directly affected by the proposals (the landlords and tenants) provided data for the exercise, so any credit is due to them. This post has skimmed over some of the details about small landholdings, whereas the report goes into the background, the current regime, and the potential for the future in detail.

To offer some selected thoughts on the report’s interpretation of the future, it essentially narrows down three options, namely:

  • the status quo;
  • conversion to another type of tenancy; or
  • reform and modernisation.

The report then suggests two of them are not appropriate, as: maintaining the status quo would lead to further diminution of numbers of small landholdings (with unclear effects on rural Scotland); whilst mass conversion of small landholdings into another type of tenancy is just not quite suitable (as, for example, you could end up with crofts outside traditional and even recently expanded crofting areas, not to mention that it could have an uncertain effect on already settled positions between landlord and tenant). In passing, the report also tells us (at para 133) that to date, no small landholder in one of the new designated crofting areas has converted. Such small landholdings would be prime candidates for conversion, so this seems to show either that there is no appetite for conversion or that the existing conversion process is not appealing.

That leaves the reform and modernise option. Much could be said about this, but the two key issues that came up in consultation with respondents related to clarity of legislation (which is a bit of a bùrach across many statutes at present) and a right to buy. As regards the potential for a right to buy of any sort, irrespective of the undeniable politics of such an option it is clear that small landholdings missed out on such rights in 1976 (when an absolute right to buy was conferred on crofters) and 2003 (when a right of first refusal was given to secure 1991 Act tenants of an agricultural holding).

What next?

The Scottish Parliament will get the chance to ponder the report, but para 170 sets a number of future steps. Some of these might involve the Scottish Law Commission, the new Tenant Farming Commissioner, and the Crofting Commission. Other steps could involve researchers looking into historical data and trends relating to small landholdings, and (either related to that historical research or independently) the likely socio-economic impact of them in the present day.

To conclude, despite the relatively low numbers of small landholdings in Scotland, there is a lot of work to be done in relation to them. I will be watching carefully to see what happens next. Meanwhile, anyone who has to deal with the legislative regime will be praying a more user-friendly system emerges at the end of this process, while those directly involved with Scotland’s remaining small landholdings will be watching even more carefully than me to ensure that any new regime is workable both for modern agriculture and as a part of a healthy rural environment in Scotland.